Microeconomics I

Code:

1EC105

Acronym:

MICI

Keywords
Classification	Keyword
OFICIAL	Economics

Instance: 2021/2022 - 1S

Active?	Yes
Responsible unit:	Agrupamento Científico de Economia
Course/CS Responsible:	Bachelor in Economics

Cycles of Study/Courses

Acronym	No. of Students	Study Plan	Curricular Years	Credits UCN	Credits ECTS	Contact hours	Total Time
LECO	336	Bologna Syllabus since 2012	1	-	6	63	162

Teaching language

Portuguese

Objectives

The main objectives of this course are:
(1) understanding some basic economic instruments and principles;
(2) applying those instruments and principles to some economic problems, mainly individual decision-making problems and market problems.

Learning outcomes and competences

Every student must be able to:
(1) explain the concepts of opportunity cost and reservation price;
(2) apply the cost-benefit principle to an individual decison-making process (individual, firm or a country);
(3) explain the supply and demand model and how a perfectly competitive market works;
(4) evaluate the effects of economic measures in a perfectly competitive market (e.g., introduction of a tax);
(5) explain the decision-making process of an individual consumer;
(6) evaluate the effects of a change in the price of a good or in consumer's income in the decisions of an individual consumer;
(7) compute the total price effect and decompose it into a substituion effect and an income effect.

Working method

Presencial

Program

Chapter 0. Mathematical instruments: Graphical analysis; Total value, average value and marginal value. Part I-Basic Economic Concepts Chapter 1. Choice and Scarcity 1.1 The principle of scarcity 1.2 The cost-benefit principle 1.2.1 Opportunity cost 1.2.2 Reservation price 1.2.3 The opportunity cost and the best alternative activity 1.2.4 Distinction between average cost (benefit) and marginal cost (benefit) 1.2.5 The opportunity cost and the sunk cost 1.3 Absolute advantage and comparative advantage 1.4 Production possibilities curve 1.5 Positive analysis versus normative analysis 1.6 Microeconomics versus macroeconomics Chapter 2. Supply and Demand 2.1 The concept of a market 2.2 Demand 2.2.1 The market demand curve 2.2.2 Determinants of the market demand 2.3 Supply 2.3.1The market supply curve 2.3.2 Determinants of the market supply 2.4 Market equilibrium 2.5 Changes in market equilibrium 2.6 Elasticity 2.6.1 The price elasticity of demand 2.6.2 The income elasticity of demand 2.6.3 The cross-price elasticity of demand 2.6.4 The price elasticity of supply  Chapter 3. Supply, Demand and Government Policies 3.1 Controls on prices 3.1.1 Price ceilings 3.1.2 Price floors 3.2 Production Quotas 3.3. Taxes 3.4 Applications Chapter 4. Supply, Demand and Efficiency of Markets 4.2 Consumer Surplus 4.2 Producer surplus 4.3 Market equilibrium and efficiency 4.4 Market efficiency and economic policies 4.4.1 Market efficiency and taxes 4.4.2 Market efficiency and production quotas 4.5 Applications Part II – Consumer Choice Theory and Demand Chapter 5. Consumer Behavior 5.1 Consumer preferences 5.1.1 Properties of consumer preferences 5.1.2 Indifference curves 5.1.3 Cardinal utility versus ordinal utility 5.2 Budget constraint 5.3 The consumer´s optimal choice 5.4 Generalization to several consumer goods 5.5 Applications Chapter 6. Individual demand and market demand 6.1 Changes in Income 6.2. Changes in prices 6.3 Deriving the demand curve 6.3 Income and substitution effects 6.5 Applications

Mandatory literature

N. Gregory Mankiw e Mark P. Taylor; Microeconomics, 2ª edição, Cengage, 2011
David Besanko and Ronald Braeutigam; Microeconomics, 4ª edição, John Wiley & Sons, Inc., 2011

Complementary Bibliography

Frank, Robert e Bern Bernanke; Princípios de Economia, McGraw-Hill, 2003

Teaching methods and learning activities

Theoretical and applied lectures. 

Evaluation Type

Distributed evaluation with final exam

Assessment Components

Designation	Weight (%)
Teste	20,00
Exame	80,00
Total:	100,00

Amount of time allocated to each course unit

Designation	Time (hours)
Estudo autónomo	103,50
Frequência das aulas	58,50
Total:	162,00

Eligibility for exams

Students can choose to do either a final exam or two tests and the final exam.  
The first test covers chapter 1; the second test covers chapters 2, 3 and 4. The final exam covers all the chapters of the program.
Students have 30 minutes to do each test and 90 minutes to do the exam.

Calculation formula of final grade

Students can choose to do either a final exam or two tests and the final exam. In the latter case, the two tests have a weight of 25% and the exame 75%. Students who choose doing the two tests and the exam must have an average of 9.5, as long as the grade of any of the two tests is not less than 6.0. If the grade of any of the two tests is less than 6.0, the student fails by tests, yet he/she can do the final exam.

The final grade is calculated as follows:
maximum{25%*grade of the tests+75%*grade of the exam; grade of the exam}.

The grades of the tests are not considered to compute the final grade when the student do the second final exam to improve his/her grade.